January 8th, 2009
11:23 AM ET
5 years ago

TRANSITION: Obama addresses the economy

Watch Obama's speech on CNN.com/live.
Watch Obama's speech on CNN.com/live.

(CNN) - President-elect Barack Obama on Thursday said Congress must take "dramatic action" on his economic aid package as soon as possible, warning that a failure to do so would have devastating long-term consequences for the nation.

"If nothing is done, this recession could linger for years. The unemployment rate could reach double digits," he said.

Obama laid the groundwork for urgent movement on his "American Recovery and Reinvestment Plan," a plan he says will save or create more than 3 million jobs and invest in health care, energy and education, among other priorities.

Full story

Read the full speech after the jump

Throughout America’s history, there have been some years that simply rolled into the next without much notice or fanfare. Then there are the years that come along once in a generation – the kind that mark a clean break from a troubled past, and set a new course for our nation.

This is one of those years.

We start 2009 in the midst of a crisis unlike any we have seen in our lifetime – a crisis that has only deepened over the last few weeks. Nearly two million jobs have now been lost, and on Friday we are likely to learn that we lost more jobs last year than at any time since World War II. Just in the past year, another 2.8 million Americans who want and need full-time work have had to settle for part-time jobs. Manufacturing has hit a twenty-eight year low. Many businesses cannot borrow or make payroll. Many families cannot pay their bills or their mortgage. Many workers are watching their life savings disappear. And many, many Americans are both anxious and uncertain of what the future will hold.

I don’t believe it’s too late to change course, but it will be if we don’t take dramatic action as soon as possible. If nothing is done, this recession could linger for years. The unemployment rate could reach double digits. Our economy could fall $1 trillion short of its full capacity, which translates into more than $12,000 in lost income for a family of four. We could lose a generation of potential and promise, as more young Americans are forced to forgo dreams of college or the chance to train for the jobs of the future. And our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world.

In short, a bad situation could become dramatically worse.

This crisis did not happen solely by some accident of history or normal turn of the business cycle, and we won’t get out of it by simply waiting for a better day to come, or relying on the worn-out dogmas of the past. We arrived at this point due to an era of profound irresponsibility that stretched from corporate boardrooms to the halls of power in Washington, DC. For years, too many Wall Street executives made imprudent and dangerous decisions, seeking profits with too little regard for risk, too little regulatory scrutiny, and too little accountability. Banks made loans without concern for whether borrowers could repay them, and some borrowers took advantage of cheap credit to take on debt they couldn’t afford. Politicians spent taxpayer money without wisdom or discipline, and too often focused on scoring political points instead of the problems they were sent here to solve. The result has been a devastating loss of trust and confidence in our economy, our financial markets, and our government.

Now, the very fact that this crisis is largely of our own making means that it is not beyond our ability to solve. Our problems are rooted in past mistakes, not our capacity for future greatness. It will take time, perhaps many years, but we can rebuild that lost trust and confidence. We can restore opportunity and prosperity. We should never forget that our workers are still more productive than any on Earth. Our universities are still the envy of the world. We are still home to the most brilliant minds, the most creative entrepreneurs, and the most advanced technology and innovation that history has ever known. And we are still the nation that has overcome great fears and improbable odds. If we act with the urgency and seriousness that this moment requires, I know that we can do it again.

That is why I have moved quickly to work with my economic team and leaders of both parties on an American Recovery and Reinvestment Plan that will immediately jumpstart job creation and long-term growth.

It’s a plan that represents not just new policy, but a whole new approach to meeting our most urgent challenges. For if we hope to end this crisis, we must end the culture of anything goes that helped create it – and this change must begin in Washington. It is time to trade old habits for a new spirit of responsibility. It is time to finally change the ways of Washington so that we can set a new and better course for America.

There is no doubt that the cost of this plan will be considerable. It will certainly add to the budget deficit in the short-term. But equally certain are the consequences of doing too little or nothing at all, for that will lead to an even greater deficit of jobs, incomes, and confidence in our economy. It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe. Only government can break the vicious cycles that are crippling our economy – where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.

That is why we need to act boldly and act now to reverse these cycles. That’s why we need to put money in the pockets of the American people, create new jobs, and invest in our future. That’s why we need to re-start the flow of credit and restore the rules of the road that will ensure a crisis like this never happens again.

That work begins with this plan – a plan I am confident will save or create at least three million jobs over the next few years. It is not just another public works program. It’s a plan that recognizes both the paradox and the promise of this moment – the fact that there are millions of Americans trying to find work, even as, all around the country, there is so much work to be done. That’s why we’ll invest in priorities like energy and education; health care and a new infrastructure that are necessary to keep us strong and competitive in the 21st century. That’s why the overwhelming majority of the jobs created will be in the private sector, while our plan will save the public sector jobs of teachers, cops, firefighters and others who provide vital services.

To finally spark the creation of a clean energy economy, we will double the production of alternative energy in the next three years. We will modernize more than 75% of federal buildings and improve the energy efficiency of two million American homes, saving consumers and taxpayers billions on our energy bills. In the process, we will put Americans to work in new jobs that pay well and can’t be outsourced – jobs building solar panels and wind turbines; constructing fuel-efficient cars and buildings; and developing the new energy technologies that will lead to even more jobs, more savings, and a cleaner, safer planet in the bargain.

To improve the quality of our health care while lowering its cost, we will make the immediate investments necessary to ensure that within five years, all of America’s medical records are computerized. This will cut waste, eliminate red tape, and reduce the need to repeat expensive medical tests. But it just won’t save billions of dollars and thousands of jobs – it will save lives by reducing the deadly but preventable medical errors that pervade our health care system.

To give our children the chance to live out their dreams in a world that’s never been more competitive, we will equip tens of thousands of schools, community colleges, and public universities with 21st century classrooms, labs, and libraries. We’ll provide new computers, new technology, and new training for teachers so that students in Chicago and Boston can compete with kids in Beijing for the high-tech, high-wage jobs of the future.

To build an economy that can lead this future, we will begin to rebuild America. Yes, we’ll put people to work repairing crumbling roads, bridges, and schools by eliminating the backlog of well-planned, worthy and needed infrastructure projects. But we’ll also do more to retrofit America for a global economy. That means updating the way we get our electricity by starting to build a new smart grid that will save us money, protect our power sources from blackout or attack, and deliver clean, alternative forms of energy to every corner of our nation. It means expanding broadband lines across America, so that a small business in a rural town can connect and compete with their counterparts anywhere in the world. And it means investing in the science, research, and technology that will lead to new medical breakthroughs, new discoveries, and entire new industries.

Finally, this recovery and reinvestment plan will provide immediate relief to states, workers, and families who are bearing the brunt of this recession. To get people spending again, 95% of working families will receive a $1,000 tax cut – the first stage of a middle-class tax cut that I promised during the campaign and will include in our next budget. To help Americans who have lost their jobs and can’t find new ones, we’ll continue the bipartisan extensions of unemployment insurance and health care coverage to help them through this crisis. Government at every level will have to tighten its belt, but we’ll help struggling states avoid harmful budget cuts, as long as they take responsibility and use the money to maintain essential services like police, fire, education, and health care.

I understand that some might be skeptical of this plan. Our government has already spent a good deal of money, but we haven’t yet seen that translate into more jobs or higher incomes or renewed confidence in our economy. That’s why the American Recovery and Reinvestment Plan won’t just throw money at our problems – we’ll invest in what works. The true test of the policies we’ll pursue won’t be whether they’re Democratic or Republican ideas, but whether they create jobs, grow our economy, and put the American Dream within reach of the American people.

Instead of politicians doling out money behind a veil of secrecy, decisions about where we invest will be made transparently, and informed by independent experts wherever possible. Every American will be able to hold Washington accountable for these decisions by going online to see how and where their tax dollars are being spent. And as I announced yesterday, we will launch an unprecedented effort to eliminate unwise and unnecessary spending that has never been more unaffordable for our nation and our children’s future than it is right now.

We have to make tough choices and smart investments today so that as the economy recovers, the deficit starts to come down. We cannot have a solid recovery if our people and our businesses don’t have confidence that we’re getting our fiscal house in order. That’s why our goal is not to create a slew of new government programs, but a foundation for long-term economic growth.

That also means an economic recovery plan that is free from earmarks and pet projects. I understand that every member of Congress has ideas on how to spend money. Many of these projects are worthy, and benefit local communities. But this emergency legislation must not be the vehicle for those aspirations. This must be a time when leaders in both parties put the urgent needs of our nation above our own narrow interests.

Now, this recovery plan alone will not solve all the problems that led us into this crisis. We must also work with the same sense of urgency to stabilize and repair the financial system we all depend on. That means using our full arsenal of tools to get credit flowing again to families and business, while restoring confidence in our markets. It means launching a sweeping effort to address the foreclosure crisis so that we can keep responsible families in their homes. It means preventing the catastrophic failure of financial institutions whose collapse could endanger the entire economy, but only with maximum protections for taxpayers and a clear understanding that government support for any company is an extraordinary action that must come with significant restrictions on the firms that receive support. And it means reforming a weak and outdated regulatory system so that we can better withstand financial shocks and better protect consumers, investors, and businesses from the reckless greed and risk-taking that must never endanger our prosperity again.

No longer can we allow Wall Street wrongdoers to slip through regulatory cracks. No longer can we allow special interests to put their thumbs on the economic scales. No longer can we allow the unscrupulous lending and borrowing that leads only to destructive cycles of bubble and bust.

It is time to set a new course for this economy, and that change must begin now. We should have an open and honest discussion about this recovery plan in the days ahead, but I urge Congress to move as quickly as possible on behalf of the American people. For every day we wait or point fingers or drag our feet, more Americans will lose their jobs. More families will lose their savings. More dreams will be deferred and denied. And our nation will sink deeper into a crisis that, at some point, we may not be able to reverse.

That is not the country I know, and it is not a future I will accept as President of the United States. A world that depends on the strength of our economy is now watching and waiting for America to lead once more. And that is what we will do.

It will not come easy or happen overnight, and it is altogether likely that things may get worse before they get better. But that is all the more reason for Congress to act without delay. I know the scale of this plan is unprecedented, but so is the severity of our situation. We have already tried the wait-and-see approach to our problems, and it is the same approach that helped lead us to this day of reckoning.

That is why the time has come to build a 21st century economy in which hard work and responsibility are once again rewarded. That’s why I’m asking Congress to work with me and my team day and night, on weekends if necessary, to get the plan passed in the next few weeks. That’s why I’m calling on all Americans – Democrats and Republicans – to put good ideas ahead of the old ideological battles; a sense of common purpose above the same narrow partisanship; and insist that the first question each of us asks isn’t “What’s good for me?” but “What’s good for the country my children will inherit?”

More than any program or policy, it is this spirit that will enable us to confront this challenge with the same spirit that has led previous generations to face down war, depression, and fear itself. And if we do – if we are able to summon that spirit again; if are able to look out for one another, and listen to one another, and do our part for our nation and for posterity, then I have no doubt that years from now, we will look back on 2009 as one of those years that marked another new and hopeful beginning for the United States of America. Thank you, God Bless You, and may God Bless America.

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Filed under: Candidate Barack Obama
soundoff (217 Responses)
  1. kuriya

    All of you that oppose Obama's economic covering plan do you have better idea if you do please let us know, if you don't them let us put trust in him. At least he is not lying to us that the economy is in good or in denial. He say it as we all see it. If nothing is done about the economy we will all be saying what did we do. Remember when we were bashing GM for the stimulus package they are not making cars like Toyota and Honda. Do you read that Toyota is putting off production off for a while, because of the economy? I think some of you should do more research and read more.

    January 8, 2009 02:34 pm at 2:34 pm |
  2. Kenny

    I know its been a long while since you have had to actually take money out of your pocket and pay for anything Mr. Obama,you are a disconnected Multi-Millionaire, but being from the real world I am going to try and help you 500 dollars will NEVER stimulate anything period, and road and bridge jobs I have 2 words for you BIG DIG, even if you are not from Boston you know what that means. If you really want to stimulate the economy give everbody a bunch of money we will spend it and the economy will take care of itself with jobs overtime etc. to keep up with everything we are buying.

    January 8, 2009 02:35 pm at 2:35 pm |
  3. Matt

    @ sg

    If you need to go learn HVAC or drive a truck to put food on the table you do it. Bag groceries or tend bars on weekends if you have to. It's called making ends meet and taking opportunities where you find them and it sometimes takes effort, humility and a big dose of sucking it up. It's sad that people are losing their jobs, but if other jobs are out there, people should be clawing each others' eyes out for them, not collecting unemployment and saying "I'm a [insert job title] and that's the only thing I will do...otherwise, it's the sofa for me."

    January 8, 2009 02:40 pm at 2:40 pm |
  4. Matthew, Houston, TX

    Get Serious,

    Are you reading Rush Limbaugh and Sean Hannity's version of history again? You see, I've read the actual history and know that you haven't got a clue about what actually happened and are probably one of those 'supply side' adherents when it comes to economics.

    Basically, you don't know what you're talking about and have proven it wiht every post.

    January 8, 2009 02:46 pm at 2:46 pm |
  5. Stacy from Leesburg VA

    From the looks of it, John Galt is some repetitious buffoon that comes on internet boards and tries to look intelligent by posting the same query time and again. Little does he know that it makes him appear unoriginal at best and just plain stupid at worst. Let me pose a question now: who is the real slim shady?

    January 8, 2009 02:48 pm at 2:48 pm |
  6. Shari, NY

    While you are bashing Obama's plan, do remember that he stated it would take a long time to clear up the mess (which he did not create). If you can do better, then why not apply for the job?

    January 8, 2009 02:52 pm at 2:52 pm |
  7. Mary - Independent

    You negative bloggers – give Obama a chance – remember he is trying to "clean up Bush's dirty laundry". With the severe damage done to our economy, it will take time and patience.

    January 8, 2009 03:08 pm at 3:08 pm |
  8. Puff

    I truley think President Elect Obama should be put on trial for inciting a public riot. Worst case scenario, he's inciting the entire world thinking the US is in the worst shape ever and is boarding complete collapse. Best case scenario, he's doing that same thing to millions of American's (and others) foolish enough to believe him just because he's the President (elect). He's making it sound as horrible as he possibly can so that A) he gets all the money he wants to spend and B) when things become any better at all he'll be standing tall at the top taking the credit.

    January 8, 2009 03:13 pm at 3:13 pm |
  9. BJ

    Won't you demoncrats at least take credit for the two years you have been in charge of the Congress? (Which by the way has a lower opinion rating than GW).

    All I hear is blame Bush, blame Bush. The Demoncrats have been in control of both houses of Congress for over two years, but refuse to take any responsibility for their actions (or inactions).

    What are you going to say in four years? Who you gonna blame then?

    As Proud American would say...idiots.

    January 8, 2009 03:16 pm at 3:16 pm |
  10. Debby, NJ

    Puff: You are an IDIOT!!! You also must have been one of the IDOITS that voted Bush into office twice. Puff huh, what the HELL ARE YOU SMOKING?

    January 8, 2009 03:23 pm at 3:23 pm |
  11. BUSH BEGOND AND NOW 82% OF AMERICA AGREES, FINALLY!

    @SJ

    Do not be so flippant, from one high tech employee to another after you have not found a job in 8 months, you will be happy to take a construction job or any other job out there and you will be happy to have a salary decrease from 80K to 19K, 'cuz at least you get to eat.

    Trust me.

    January 8, 2009 03:39 pm at 3:39 pm |
  12. Darian

    Enough is enough!! Wether it be George Bush or Barrack Obama who cares. We do nothing but keep talking and no actions are being taken. He did this wrong, Oh it's another Great Depression, Im gona fix this, Im gona do that. We'll guess what, while we keep pointing fingers and talking about what were going to do the people of the US are losing there jobs, losing health care, losing there homes and I can go on forever. Let's stop doing all this talking and start taking action. The American people have had to listen to this crap over the last year and some change. Do you understand how much could have been done in that time frame. But I guess we (the american people) cant be that mad at anyone but ourselves cause we are the one's who put you in power. We can only blame ourselves. Were just asaking you to fix it. Don't you like how that works. It's great!! Stop talking and start working!!

    January 8, 2009 03:41 pm at 3:41 pm |
  13. Darian

    How much money was spent of our hard earned tax dollars for that year plus of campaign adds, slanders, pictures, posters and all that other crap. Imagine all that money back in the economy where It should have been. Millions and millions add up. That would help right???

    January 8, 2009 03:50 pm at 3:50 pm |
  14. F. Williamson

    Why is it that the people of The United States of America think that they are better than all the other people who live on this planet.? Are most people from the United States of America even remember where their families came from?

    January 8, 2009 04:05 pm at 4:05 pm |
  15. D.Tin

    People stop being negative. No one solution is going to get us out of our situation, and Obama is only giving us a set of directions, some will work and some will probably not work. At least he recognizes early that we need help..Bush and McCain did not. Now stop looking for government to to "save" us soley, why now the interest in government being involved in our business. Those who want less washington involvement should press their state government for economic help. The reality is that americans need to scale back on everything, an I am for that. We need to start relying on goods and services made in america, this will help american business and provide work.

    January 8, 2009 04:05 pm at 4:05 pm |
  16. mike

    To Proud American:

    Your unemployment check will be in the mail soon.

    January 8, 2009 04:12 pm at 4:12 pm |
  17. nucsol

    Maybe we will like our new lower standard of living ? Mr. Obama will just be that soothing ointment you can rub all over your orifaces after you finish your eighty hour work week. Don't like that idea ? Well we are not going to have much of a choice since in the eyes of our employers we are all disposable garbage.
    I like the new President but he is still part of the machine responsible for grinding up our country. How could you not see that sending all of our jobs to other countries while the workers who held them also held a balance of debt based on their then income ? Myself, my wife, my friends all lost their stock options, 401 K, income and insurance in 2001. Then comes round two, then round three with 911 and the 2nd Gulf War. Now we have Israel, Iran, Lebenon, Gaza, Iraq, Afiganistan, India, Pakistan getting ready to grease up the skids and let us not forget Russia.
    We are not the World Police and the melting pot has melted. If President Elect Obama can fix this without WWIII he will go down as the greatest leader in the history of Mankind. If not, what choice was he left with ?

    January 8, 2009 04:30 pm at 4:30 pm |
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